I can’t imagine anything less interesting in business than maximizing shareholder value. Yet this is what public companies are pressured – if not legally required – to do. A lot of non-public companies follow the same path towards performance and results.
To take it further, maximization as a concept just isn’t interesting to me. I don’t care about maximization. Not maximization of profit, revenue, people, reach, productivity, etc. Not interesting.
I feel like this makes me an outcast in the business world. Part of the minority, the ones who simply “don’t get how it works”.
I get how it works. I just don’t care. I’m not interested in squeezing something so tight that I get every last drop. I don’t want, need, or care about every last drop. Those last drops usually don’t taste as good anyway. My thirst is usually well quenched far before that final drop.
Am I interested in increasing profits? Yes. Revenues? Yes? Being more productive? Yes. Making our products easier, faster, and more useful? Yes. Making our customers and employees happier? Yes, absolutely. Do I love iterating and improving? Yes sir.
Do I want to make things better? All the time. But do I want to maximize “betterness”? No thanks.
I don’t mind leaving some water in the cloth, some drips in the glass, some money on the table. I like knowing there’s headroom. And once in a while it’s a fun challenge to chip away at that headroom. But that’s not for maximization’s sake – it’s for curiosity’s sake. “Can we do it?” is a lot more interesting to me than “we must do it because that’s what you’re supposed to do.”
Having fun, exploring ideas, creating, solving, building great things for you and your customers, being proud of your work, challenging yourself, learning, growing, building a self-sustaining company on your own schedule, adding something useful to the world, and working with great people – that’s what this is all about. Not maximization of a metric.
Signal vs. Noise is a founding member of The Deck advertising network
When you’re building a new product, you’re often thinking about all the new things people are going to be able to do with it. Now they can do this, now they can do that. Exciting!
But there’s a better question to ask: What are people going to stop doing once they start using your product?
What does your product replace? What are they switching from? How did they do the job before your product came along?
Habit, momentum, familiarity, anxiety of the unknown – these are incredibly hard bonds to break. When you try to sell someone something, you have to overcome those bonds. You have to break the grip of that gravity.
So, when you’re thinking about your product, think about what it replaces, not just what it offers. What are you asking people to leave behind when they move forward with you? How hard will that be for them? How can you help them overcome everything that’s tugging them in the opposite direction?
Back in November I said we were looking for an iOS protoyper. I probably heard from about a hundred people who were interested in the position.
In the end, one guy stood out above all the rest.
His name is Travis Jeffery. Today is his first day at 37signals.
Travis and I have already started working on an app together. We’re excited to see where it goes.
Everyone, say hi to Travis.
Find more opportunities on the 37signals Job Board.
Since the beginning, Basecamp has been marketed as a collaboration tool for small businesses (or small groups inside larger businesses).
However, over the years we’ve also heard from many thousands of people who use Basecamp outside of work. They’ve turned to Basecamp to help them manage home improvement projects, hobby projects, volunteer projects, school projects, weddings, etc.
But one complaint we’ve heard is… Basecamp is priced for businesses, not for personal side projects.
So today we’re going to make it easier for people to use Basecamp for their non-work projects. Today we launch Basecamp Personal.
Basecamp Personal is priced for personal projects. Instead of paying a monthly subscription fee, you can buy a Basecamp Personal project for $25. That’s a one-time-fee. Just $25, and it’s yours. Need another project down the road? Buy another one for $25. Buy one, buy many – buy just what you need, as you need it, and never have to worry about paying a monthly subscription.
How else is Basecamp Personal different from Basecamp?
Basecamp Personal projects include 1 GB of file space and you can collaborate with up to five people. There are a few other differences, too. Here’s how Basecamp Personal compares to the full version of Basecamp.
Available exclusively for current Basecamp users
For the next few months, Basecamp Personal is available exclusively for current Basecamp users. You don’t have to be the Basecamp account owner – you just have to be a user on a Basecamp account, any Basecamp account.
Down the road we plan on opening up Basecamp Personal to anyone. But for now, it’s just for people who already use Basecamp.
Start a project today
So if you have a Basecamp account already, and you have a personal project that could use some Basecamp-style organization, hop on over and get yourself a Basecamp Personal project today for just $25.
Take a tour to see why others use Basecamp every day.
Lately I’ve been spending some time with local entrepreneurs who are looking for business advice. Inevitably, the topic of pricing comes up. “How do I know how much to charge?”
There are lots of answers.
You can make up a number and see if it works. You can test a few different prices at the same time. You can do traditional market research and see what you find. You can read pricing books and academic papers on pricing approaches, techniques, and behavioral psychology. You can see what others are charging.
The good news about pricing is that you can guess, be wrong, but still be right enough to build a great sustainable business. Maybe you’re leaving some money on the table, but, like my dad always says, no one ever went broke making a profit.
However, you are not allowed to ask people:
- “What would you pay for this?”
- “Would you buy this for $20?”
- “How much do you think this is worth?”
- “What’s the most you’d pay?”
And these are the questions I hear people asking over and over. You can’t ask people who haven’t paid how much they’re willing to pay. Their answers don’t matter because there’s no cost to saying “yes” ”$20” “no” ”$100”. They all cost the same – nothing.
The only answers that matter are dollars spent. People answer when they pay for something. That’s the only answer that really matters.
So put a price on it and put it up for sale. If people buy that’s a yes. Change the price. If people buy, that’s a yes. If people stop buying, that’s a no. Crude? Maybe. But it’s real.
You can dig into the why’s more deeply over time, but you have to start somewhere. And the best place to start is with real answers. This is why we picked $10 for a Basecamp Breeze email address.
When visitors come to our office, one of the first things they notice is how quiet it is. Naturally, one of the first questions they ask is “how do you keep it so quiet?”
My answer is “library rules.”
Everyone knows how to behave in a library. You keep quiet or whisper. You respect people’s personal space. You don’t interrupt people who are reading or working, learning or studying. And if you need to have a full-volume conversation, you hit a private room.
So if you want to keep things quiet at the office, treat it like a library. It works surprisingly well.
When the geography of labour ceases to be an important part of production, attempts to keep foreign workers out of a country become counterproductive. Workers who stay remote will be subject to remote expenses. If those are lower, it’s harder to compete.
Say the cost of living in San Francisco is 100 and the cost of living in Prague is 50. You can thus pay a remote worker living in the latter city 70 and he will have as much disposable income as a local worker in the former earning 120 (both will have 20 in disposable income).
This is much lower than importing labour to San Francisco and “underpaying” them. Say you do that and only pay them a disposable sum of 10. Your labour cost is thus still 110. Not much of a comparable saving to that of going remote.
So if you’re a local worker, would you rather compete against imported labour that undercuts your rate by 10 or a remote worker that undercuts it by 50? That depends on the efficiency of that remote worker, of course. If being remote means they can only do half as good a job, no problem. If they do 90% as good of a job, big problem.
Another angle: What if you pay both the local and the remote workers the same, say, 120? In Prague, that would mean you can attract the same quality of talent that it would cost you 170 to attract in San Francisco (holding all other things equal, for the sake of argument).
As the world gets better at remote collaboration, this is only going to get worse—or better, depending on your perspective. Up until recent history, protectionists have been able to claim that having someone in a remote location is simply too inefficient. So the argument could stay about the process. (Pair programming and other co-location techniques are great fodder for these kinds of arguments).
When the process becomes a minor issue, it’ll have to become about the people, if you want to stay a protectionist. That is the claims will have to be about how the remote workers are worse workers. Not as smart, not as easy to talk to, not as proficient. I reckon those arguments are not going to have a long term future.
Likewise, I reckon that fighting to keep local supply of skilled labour down in areas of work that can be done remotely also does not have a long term future.
Twitter started out life as a wonderfully inclusive society. There were very few rules and the ones there were the people loved. Thou shall be brief, retweet to respect. Under this constrained freedom, Twitter prospered and grew rapidly for the joy of all.
Budding entrepreneurs built apps that made life better for everyone. Better, in fact, than many of Twitter’s own attempts. They competed for attention on a level playing field and the very best rose to the top. Users saw that this was good and rewarded Twitter with their attention. Twitter grew.
Unfortunately this inclusive world was not meant to last. From the beginning, an extractive time bomb was ticking. One billion dollars worth of eagerness for return. Hundreds and hundreds of hungry mouths to feed in a San Francisco lair.
And thus began Twitter’s descent into the extractive. First, they paid lip service to the society. Their curtailing of freedoms was for the betterment of all, you see.
The “consistency of the user experience” was imported as a new ideal. But the populace was nonplussed. Who was this ideal for? Who had asked for variety to be curtailed? Not us, said the people.
But objections be damned, the Twitter lords marched on. After all, they knew the billion was growing restless and the minions in their lair equally so. Turning back now was not on the table, lest they risk the anger and fury of the billion.
So it went that the extractive provisions were rolled out quicker and wider. The initial feigned attempts at covering new rules and restrictions with “it’s in everyone’s interest” fell further by the wayside with every new decree from the lords.
While the original rules were simple and fair—140 characters for all—the new rules were complicated, opaque, and easy to bend for the favored.
Some early app entrepreneurs would get access to 200,000+ users by the nature of their legacy stature; new ones would get half. Favored masters of Big Media would get to break the law of 140. And the Twitter lords themselves would expropriate and evict on a whim.
The populace grumbled and groaned, but like the frog boiled slowly, they adjusted to their new temperature one degree at a time.
Twitter’s billion was happy. Progress was being made to extract the most from these fertile lands it had lent. And with the billion happy, the lords were happy, and so too all of the lair.
“I wonder how long this one will last?”, asked the Web to his friend Email. “Who knows”, said Email, “Facebook is still around”. “Aye”, nodded the Web, “Winter might be longer this time around, but inevitably Spring will return”.
The book Why Nations Fail makes the argument that sustained societal prosperity is only possible when economic and political institutions are inclusive instead of extractive. It’s a little long-winded, but the historical accounts of the rise and fall of the Roman Republic and the Venetian city-state in particular are fascinating.
Both societies entered eras of strong growth and prosperity when they allowed larger parts of its citizens to partake in political and economic life. This glory phase lasted for generations, but eventually the elite sought to protect entrenched power and privilege and turned inclusive institutions back to being extractive. Thus began the decline and eventually demise of their success.
This is a drastic simplification and there is much more to both stories, but it got me thinking about just how fragile the commercial freedoms for software developers I listed yesterday are. There are many forces and elites working to turn this wonderland of prosperity and innovation into another wasteland. Here are some of the threats as I perceive them:
- Patents and trolls: When you can be shaken down at any time for bullshit patents, the risk of starting something new rises. Only elites with big protective patent portfolios and huge legal war chests are safe.
- Censorship and regulation: It’s easy to point at China and shudder at their explicit, heavy-handed shutdown of services, but there have been plenty “Why Won’t Someone Please Think Of The Children” campaigns elsewhere too. It usually starts with something like porn, and then everyone else is next.
- Net neutrality: Imagine if you had to enter separate agreements with every ISP in the world to get full-speed access to all your potential customers. Only the established elite would be able to navigate such shark-infested waters.
- The rise of app stores: When you’re at the mercy of the arbitrary whims of an elite landowner, you’re at constant risk of eviction or expropriation. This on top of, in classic extractionist style, working for free two days out of the week (30% cut).
If history is any guide, the amazing freedom and the prosperity we celebrate is easy to take for granted—right up until it’s gone. Progress often begets regression. The dark ages of commercial freedom is never more than a few elite power grabs away.